Sally’s Beauty Supply

Founded in 1964 with one store in New Orleans, Sally’s Beauty Supply has grown to be the  world’s  largest  retailer  of professional beauty  supplies. Specializing in well-known as well as hard  to find products, Sally’s carries  over 6,000  products for hair, skin, and nails and are available to retail customers and salon professionals in over 2,700  store  locations throughout the  United States  and  internationally. Sally’s Beauty  Supply  came  of age in the  era of small  neighborhood beauty salons, and although it has never been  associated with haute couture, it has been the  mainstay for small businesses, students, and  especially  do-it-yourselfers who are happy  to pay less money  for knock-off brands that,  in the eyes of many  consumers, achieve  the same result. Although the name  alone  suggests that  Sally’s is far from  trendy, it has recently  incorporated new features in its sales strategies to access younger and  computer-/Internet-savvy customers. Sally’s has added  both a Facebook page and Twitter sites that  keep customers apprised of sales, and sites where they can download additional savings coupons. Its sales strategy  appears to be working as more  customers join the Beauty Club  and  are thereby encouraged to visit the stores  more  frequently.

History and Holdings

Headquartered in Denton, Texas, Sally’s has grown dramatically and steadily since the  late  1960s  through acquisitions of other national and  international beauty supply  enterprises. Sally’s Beauty  Holdings comprises Sally’s Beauty  Supply,  the retail portion, and Beauty Systems Group, which sells 9,500 professionally branded products targeted exclusively for professional and salon  use. The  combined holdings sell and distribute to over 3,300  stores, including 170 franchise units. Beauty Systems  Group began  aggressive  acquisitions of other businesses in 1985, and its portion of the  holdings comprises approximately 825 stores  throughout most  of the United States and Canada. Sally’s Beauty Holdings is a freestanding company traded on the New York Stock  Exchange (SBH).

Sally’s Beauty  Supply  has  gained  a large share  of the  distribution market. Besides its 2,200  stores  in the 48 contiguous states,  it owns  9 stores  in Canada, 180 stores  in the  United Kingdom and  Ireland, 25 in Germany, 30 in Japan,  and  40 in Mexico.  In addition, in 2008  they  acquired 40 stores  in Belgium,  France, and Spain,  giving the company a foothold in Western Europe.

The  recent U.S. and  worldwide recession has affected  Sally’s Beauty Holdings, yet the company has remained strong enough to continue paying its acquisitions debt  and plans  to continue opening more  stores. While  direct-to-salon sales have dropped modestly, 4.1  percent in the  third  quarter of 2009,  the  holdings company  has posted a 7 percent profit. A significant portion of this  profit  is due  to a

3.2 percent increase in Sally’s Beauty  Supply  store  sales. This  increase is attributed  to the accessibility  of its generic  beauty  brands and the use of do-it-yourself products by many  of its customers in preference to visiting  salons  for more  expensive  beauty  treatments. Gross  profits  continue to rise but  are being  offset by the cost of acquisitions, hovering in the $1.2 billion  range, while total revenue for the holdings remains close to double that  amount.

Commerce and e-Commerce

Through its  acquisitions and  opening of new  locations, Sally’s Beauty  Supply stores  are readily located in many  medium-sized and larger cities. Easily accessed through both online locator sites  and  Sally’s own  Web  site,  store  locations are by company policy  open  seven  days  a week  and  for  extended hours, to  enable shopping by all sectors of customers and  especially  those  who  work  full-time. The  company offers  loyalty  incentive plans  through Beauty  Club  Cards  for  its nonprofessional clients  and  a Sally ProCard for its professional customers with discounts on items  throughout the stores.

Publicized through SallyBeauty magazine, launched in 2000,  and  its Web  site (www.sallybeauty.com), launched  in  2001,  Sally’s targets  three  customer areas: the  working beauty   professional, the  beauty   school student, and  the  general consumer.

SallyCares

Created in  1996,  SallyCares  endeavors to  provide  personal care  assistance and guidance to  women in need.  SallyCares  is divided  into  four  areas  of focus;  the SallyCares  Shelter program focuses  on  aiding  over 50 women’s domestic abuse shelters nationwide through donations of grooming and  beauty  products, and through monetary contributions through the SallyCares Anniversary Fund. Breast cancer research is the  focus  of the  second endeavor; launched in 1991,  the  City of Hope canister fundraising campaign and the annual gala have to date contributed  over  $3 million  to  breast  cancer research. The  two  other foci—SallyCares Seminars and  the funding of 10 National Cosmetology Association scholarships, demonstrate the  company’s policy  of career  building and  education for  future professionals. In recent years, the  holding company has  contributed scholarship donations to the University of North Texas and grants  to Texas Women’s University, furthering the company’s goals of encouraging women’s careers. The  benefits for Sally’s employees are four  major  areas  of insurance coverage,  time  off earned in the  first year of employment (three  weeks),  paid  holidays, tuition reimbursement, and 401(k) with company matching contributions.

Leave a Reply